1.1                          A bill for an act 
  1.2             relating to farm products; regulating liens and 
  1.3             financing statements; establishing filing 
  1.4             requirements; setting fees; appropriating money; 
  1.5             amending Minnesota Statutes 2002, sections 336A.01; 
  1.6             336A.02; 336A.03; 336A.04; 336A.05; 336A.06; 336A.07; 
  1.7             336A.08; 336A.09; 336A.10; 336A.11, subdivisions 1, 2; 
  1.8             336A.12; 336A.13; proposing coding for new law in 
  1.9             Minnesota Statutes, chapter 336A; repealing Minnesota 
  1.10            Rules, parts 8265.0100; 8265.0200; 8265.0300; 
  1.11            8265.0400; 8265.0500; 8265.0600. 
  1.12  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MINNESOTA: 
  1.13     Section 1.  Minnesota Statutes 2002, section 336A.01, is 
  1.14  amended to read: 
  1.15     336A.01 [DEFINITIONS.] 
  1.16     Subdivision 1.  [APPLICABILITY.] The definitions in this 
  1.17  section apply to this chapter. 
  1.18     Subd. 2.  [BUSINESS DAY.] "Business day" means a weekday on 
  1.19  which government offices are open for business.  Business day 
  1.20  does not include state or federal holidays, Saturdays, or 
  1.21  Sundays. 
  1.22     Subd. 2. 3.  [BUYER IN THE ORDINARY COURSE OF BUSINESS.] 
  1.23  "Buyer in the ordinary course of business" means a person who, 
  1.24  in the ordinary course of business, buys farm products from a 
  1.25  person engaged in farming operations who is in the business of 
  1.26  selling farm products. 
  1.27     Subd. 3. 4.  [COMMISSION MERCHANT.] "Commission merchant" 
  1.28  means a person engaged in the business of receiving a farm 
  2.1   product for sale on commission or for or on behalf of another 
  2.2   person. 
  2.3      Subd. 4. 5.  [COMPUTERIZED FILING SYSTEM.] "Computerized 
  2.4   filing system" means the system created by the secretary of 
  2.5   state with separate programs for filing and giving notice of 
  2.6   effective financing statements and farm products statutory liens.
  2.7      Subd. 6.  [CROP YEAR.] "Crop year" means: 
  2.8      (1) for a crop, the calendar year in which it is harvested 
  2.9   or to be harvested; 
  2.10     (2) for animals, the calendar year in which they are born 
  2.11  or acquired; and 
  2.12     (3) for poultry or eggs, the calendar year in which they 
  2.13  are sold or to be sold. 
  2.14     Subd. 7.  [DEBTOR.] "Debtor" means an individual or other 
  2.15  legal entity that has borrowed money from or is otherwise 
  2.16  indebted to a lienholder or secured party and whose farm 
  2.17  products are subject to a farm products statutory lien created 
  2.18  by operation of law or a security interest, to secure payment of 
  2.19  the obligation. 
  2.20     Subd. 5. 8.  [EFFECTIVE FINANCING STATEMENT.] "Effective 
  2.21  financing statement" means an original or reproduced copy of an 
  2.22  original a statement that meets the requirements of section 
  2.23  336A.03. 
  2.24     Subd. 6. 9.  [FARM PRODUCT.] "Farm product" means an 
  2.25  agricultural commodity, a species of livestock used or produced 
  2.26  in farming operations, or a product of a crop or the livestock 
  2.27  in its unmanufactured state, that is in the possession of a 
  2.28  person engaged in farming operations.  
  2.29     Subd. 7. 10.  [FARM PRODUCT DEALER.] "Farm product dealer" 
  2.30  means a buyer in the ordinary course of business, a commission 
  2.31  merchant, or a selling agent.  
  2.32     Subd. 8. 11.  [FARM PRODUCTS STATUTORY LIEN.] "Farm 
  2.33  products statutory lien" means a lien on farm products which is 
  2.34  given by statute or other rule of law for services or 
  2.35  materials and includes an agricultural lien as defined in 
  2.36  sections 336.9-102(a)(5); 514.963, subdivision 3; and 514.965, 
  3.1   subdivision 2; and an agricultural producer's lien as provided 
  3.2   in section 514.945. 
  3.3      Subd. 9. 12.  [FILING OFFICE.] "Filing office" means the 
  3.4   office of the county recorder or the Office of the Secretary of 
  3.5   State. 
  3.6      Subd. 10. 13.  [FILING OFFICER.] "Filing officer" means a 
  3.7   county recorder, the secretary of state, or an agent of a county 
  3.8   recorder or the secretary of state authorized to accept filings. 
  3.9      Subd. 14.  [LIENHOLDER.] "Lienholder" means an individual 
  3.10  or other legal entity who has the right to collect money from a 
  3.11  debtor and who has a farm products statutory lien. 
  3.12     Subd. 11. 15.  [LIEN NOTICE.] "Lien notice" means an 
  3.13  original or reproduced copy of an original a statement that 
  3.14  meets the requirements of section 336A.03. 
  3.15     Subd. 16.  [MONTHLY LIST.] "Monthly list" means information 
  3.16  about debtors, secured parties, lienholders, and farm products 
  3.17  that is produced by the secretary of state and distributed once 
  3.18  a month in the form of master or partial master lists. 
  3.19     Subd. 12. 17.  [PERSON.] "Person" means an individual, 
  3.20  partnership, corporation, trust, or other business entity. 
  3.21     Subd. 18.  [SECURED PARTY.] "Secured party" means an 
  3.22  individual or other legal entity that has received a security 
  3.23  interest in farm products to secure repayment of the obligation 
  3.24  owed to it. 
  3.25     Subd. 13. 19.  [SECURITY INTEREST.] "Security interest" 
  3.26  means an interest in farm products that secures payment or 
  3.27  performance of an obligation.  
  3.28     Subd. 14. 20.  [SELLING AGENT.] "Selling agent" means a 
  3.29  person, other than a commission merchant, who is engaged in the 
  3.30  business of negotiating the sale and purchase of a farm product 
  3.31  on behalf of a person engaged in farming operations.  
  3.32     Sec. 2.  Minnesota Statutes 2002, section 336A.02, is 
  3.33  amended to read: 
  3.34     336A.02 [SPECIFICATION OF FARM PRODUCTS.] 
  3.35     Subdivision 1.  [LIST OF PRODUCTS.] The secretary of state 
  3.36  shall, by rule, determine which specific farm products will be 
  4.1   included in the computerized filing and notification system.  
  4.2   Consideration shall be given to the value of the product sold 
  4.3   within the state and its marketing system.  The computerized 
  4.4   filing system must provide information about the following farm 
  4.5   products: 
  4.6      (1) wheat/durum; 
  4.7      (2) alfalfa; 
  4.8      (3) barley; 
  4.9      (4) oats; 
  4.10     (5) rye; 
  4.11     (6) sorghum; 
  4.12     (7) hay; 
  4.13     (8) flax; 
  4.14     (9) sunflowers; 
  4.15     (10) field corn; 
  4.16     (11) silage; 
  4.17     (12) canola; 
  4.18     (13) soybeans; 
  4.19     (14) dry edible beans; 
  4.20     (15) green beans; 
  4.21     (16) snap beans; 
  4.22     (17) green lima beans; 
  4.23     (18) sweet corn; 
  4.24     (19) green peas; 
  4.25     (20) potatoes; 
  4.26     (21) carrots; 
  4.27     (22) onions; 
  4.28     (23) cucumbers; 
  4.29     (24) sugar beets; 
  4.30     (25) wool; 
  4.31     (26) milk; 
  4.32     (27) eggs; 
  4.33     (28) cheese; 
  4.34     (29) apples; 
  4.35     (30) honey/bees wax; 
  4.36     (31) cattle/calves; 
  5.1      (32) hogs/pigs; 
  5.2      (33) sheep/lambs; 
  5.3      (34) horses; 
  5.4      (35) goats; 
  5.5      (36) chickens; 
  5.6      (37) broilers; 
  5.7      (38) turkeys; 
  5.8      (39) mink; 
  5.9      (40) fish; 
  5.10     (41) wild rice; and 
  5.11     (42) bison. 
  5.12     Subd. 2.  [CROPS GROWN FOR SEED.] Information about the 
  5.13  crops listed in subdivision 1 includes information on crops 
  5.14  grown for seed. 
  5.15     Sec. 3.  Minnesota Statutes 2002, section 336A.03, is 
  5.16  amended to read: 
  5.17     336A.03 [CONTENTS OF FINANCING STATEMENT OR LIEN NOTICE.] 
  5.18     Subdivision 1.  [SUBSTANTIAL COMPLIANCE.] An effective 
  5.19  financing statement or lien notice must substantially comply 
  5.20  with this section but may contain minor errors that are not 
  5.21  seriously misleading.  
  5.22     Subd. 1a.  [FORM.] (a) An effective financing statement is 
  5.23  an original or reproduced copy of the statement or an 
  5.24  electronically reproduced copy of the statement. 
  5.25     (b) A lien notice is an original or reproduced copy of the 
  5.26  notice or an electronically reproduced copy of the notice. 
  5.27     Subd. 2.  [CONTENTS.] (a) An effective financing statement 
  5.28  or lien notice must contain: 
  5.29     (1) a description of the farm products subject to the 
  5.30  security interest or farm products statutory lien, including the 
  5.31  amount of the farm products, if applicable, and a reasonable 
  5.32  description of the location of the property, including the name 
  5.33  of the county, where the farm products are produced or located; 
  5.34     (2) the name and address of the secured party or the person 
  5.35  entitled to the farm products statutory lien lienholder; 
  5.36     (3) the name and address of the debtor; 
  6.1      (4) in the case of an effective financing statement, the 
  6.2   Social Security number of the debtor, or, if the debtor is doing 
  6.3   business other than as an individual, the United States Internal 
  6.4   Revenue Service taxpayer identification number of the 
  6.5   debtor; and 
  6.6      (5) in the case of an effective financing statement, the 
  6.7   following statement with the appropriate blank checked: 
  6.8      "THIS EFFECTIVE FINANCING STATEMENT .... WILL ..... WILL 
  6.9   NOT BE TERMINATED WITHIN 30 DAYS OF THE DATE ON WHICH THE 
  6.10  OBLIGATION(S) IT SECURES NO LONGER EXIST."; and 
  6.11     (6) in the case of a lien notice, any payment obligations 
  6.12  imposed on the buyer, commission merchant, or selling agent as a 
  6.13  condition for waiver or release of the farm products statutory 
  6.14  lien. 
  6.15     (b) An effective financing statement or lien notice for one 
  6.16  or more debtors may cover more than one farm product located in 
  6.17  more than one county.  
  6.18     (c) The effective financing statement form and lien notice 
  6.19  may not be combined with a Uniform Commercial Code financing 
  6.20  statement form or format and must be filed on the form or in the 
  6.21  format designated by the secretary of state as an effective 
  6.22  financing statement/lien notice. 
  6.23     (d) An effective financing statement or the record 
  6.24  authorizing the filing of an effective financing statement must 
  6.25  contain the following statement, all in capital letters:  
  6.26     "THE INFORMATION CONTAINED IN THIS AN EFFECTIVE FINANCING 
  6.27     STATEMENT WILL BE SENT TO FARM PRODUCT BUYERS REGISTERED IN 
  6.28     MINNESOTA.  SALE OF FARM PRODUCTS TO THOSE BUYERS MAY 
  6.29     RESULT IN A CHECK BEING ISSUED PAYABLE JOINTLY TO BOTH THE 
  6.30     SELLER AND THE SECURED PARTY." 
  6.31     (e) A description of the farm products must include a 
  6.32  product code provided by the secretary of state and if 
  6.33  applicable, the amount of the farm product in those situations 
  6.34  where this information is needed to distinguish that part of the 
  6.35  farm product subject to the security interest or farm products 
  6.36  statutory lien from that part which is not.  The amount may be 
  7.1   described by the number of acres, the number of bushels, the 
  7.2   number of head, or any other accepted method of counting the 
  7.3   specific farm product.  A dollar amount may not be used as this 
  7.4   description. 
  7.5      (f) The name of the county where the farm products are 
  7.6   produced or located must be designated by using the two-digit 
  7.7   county code provided by the secretary of state. 
  7.8      (g) The party completing the effective financing statement 
  7.9   or lien notice is responsible for choosing and listing the farm 
  7.10  product and county codes on the document from the lists provided 
  7.11  by the secretary of state.  The filing officer shall reject 
  7.12  those documents that do not have farm product and county codes. 
  7.13     (h) The name of the secured party or lienholder must be the 
  7.14  full legal name of that person or other legal entity.  Business 
  7.15  names must be presented as they have been registered and only 
  7.16  those abbreviations appearing in the name as registered are 
  7.17  acceptable.  If the secured party or lienholder is an 
  7.18  individual, the person's full first name, middle initial, if 
  7.19  any, and full last name are the person's full legal name.  
  7.20  Nicknames or abbreviations of individual names, except a middle 
  7.21  initial, are not acceptable.  The single address must be a 
  7.22  mailing address and include a city, state, and zip code. 
  7.23     (i) The name of the debtor must be the full legal name of 
  7.24  the individual or other legal entity.  Business names must be 
  7.25  presented as they have been registered and only those 
  7.26  abbreviations appearing in the name as registered are 
  7.27  acceptable.  If the debtor is an individual, the person's full 
  7.28  first name, middle initial, if any, and full last name are the 
  7.29  person's full legal name.  Nicknames or abbreviations of 
  7.30  individual names, except a middle initial, are not acceptable.  
  7.31  The single address must be a mailing address and include a city, 
  7.32  state, and a zip code. 
  7.33     Subd. 3.  [SIGNATURES.] A lien notice must be signed, 
  7.34  authorized, or otherwise authenticated by the lienholder.  An 
  7.35  effective financing statement must be signed, authorized, or 
  7.36  otherwise authenticated by: 
  8.1      (1) the secured party; and 
  8.2      (2) the debtor.  
  8.3      Subd. 4.  [REQUIRED AMENDMENTS.] An effective financing 
  8.4   statement or lien notice must be amended in writing within three 
  8.5   months after material changes occur to reflect the material 
  8.6   changes.  To amend information contained on an effective 
  8.7   financing statement or lien notice, the existing effective 
  8.8   financing statement or lien notice must be terminated and a new 
  8.9   effective financing statement or lien notice filed.  The 
  8.10  amendment to an effective financing statement or a lien 
  8.11  statement must be signed, authorized, or otherwise 
  8.12  authenticated, and filed in the same manner required for the 
  8.13  original document. 
  8.14     Subd. 5.  [EFFECTIVE PERIOD.] (a) An effective financing 
  8.15  statement is effective for five years from the date of filing. 
  8.16  The effective period may be extended for additional periods of 
  8.17  five years as provided in section 336A.06. 
  8.18     (b) An effective financing statement is not effective after:
  8.19     (1) the effective financing statement lapses on the 
  8.20  expiration of the effective period; or 
  8.21     (2) a notice that the effective financing statement is 
  8.22  terminated is signed, authorized, or otherwise authenticated by 
  8.23  the secured party and filed in the filing office where the 
  8.24  original effective financing statement is filed. 
  8.25     (c) A lien notice is not effective after:  
  8.26     (1) five years from the date of filing; 
  8.27     (2) expiration of the period for commencing an action to 
  8.28  enforce the lien under applicable Minnesota law; or 
  8.29     (3) the obligation secured by the farm products statutory 
  8.30  lien no longer exists. 
  8.31     Sec. 4.  [336A.031] [SATELLITE OFFICES.] 
  8.32     Subdivision 1.  [AUTHORITY TO ESTABLISH.] The secretary of 
  8.33  state may establish satellite offices by written agreements with 
  8.34  public officials within the state for the purpose of meeting the 
  8.35  filing officer responsibilities described in this chapter.  The 
  8.36  terms of the agreement must be set by, and may be renewed by, 
  9.1   mutual agreement.  The agreement may be terminated upon 60 days' 
  9.2   notice.  The secretary must maintain a list of those public 
  9.3   officials authorized to act as satellite offices.  The secretary 
  9.4   of state must make this list available in an electronic format 
  9.5   and the list must be updated at least monthly. 
  9.6      Subd. 2.  [DUTIES.] Satellite offices must accept effective 
  9.7   financing statements and lien notices and respond to requests 
  9.8   for information pursuant to the provisions of this chapter.  A 
  9.9   filing made at a satellite office is filed and effective at the 
  9.10  same time and under the same rules provided for filing in any 
  9.11  other manner in the computerized filing system.  The filing 
  9.12  date, time, and file number for any effective financing 
  9.13  statement or lien notice accepted at a satellite office must be 
  9.14  automatically assigned by the computerized filing system 
  9.15  operated by the secretary of state, and the file number must be 
  9.16  the next available file number in the computerized filing system.
  9.17     Subd. 3.  [FILINGS ON OR AFTER JULY 1, 2001.] This 
  9.18  subdivision applies to all effective financing statements and 
  9.19  lien notices filed on or after July 1, 2001.  The secretary of 
  9.20  state shall maintain all effective financing statements and lien 
  9.21  notices and the database used to index them regardless of where 
  9.22  or how the statement or notice was filed.  The documents and 
  9.23  database must be housed in the computerized filing system.  
  9.24  These documents and data must be available from the secretary of 
  9.25  state or any satellite office.  Any filing office authorized to 
  9.26  be a part of the computerized filing system may respond to 
  9.27  requests for information, and the secretary of state shall 
  9.28  establish and administer a system to facilitate those responses. 
  9.29     Subd. 4.  [FILINGS BEFORE JULY 1, 2001.] This subdivision 
  9.30  applies to all effective financing statements and lien notices 
  9.31  filed before July 1, 2001.  The database containing the 
  9.32  information from the effective financing statements and lien 
  9.33  notices must be housed in the computerized filing system. 
  9.34     Subd. 5.  [PERFORMANCE OF FILING OFFICERS.] (a) All filing 
  9.35  officers must perform the responsibilities required under this 
  9.36  chapter and rules adopted pursuant to this chapter in a uniform 
 10.1   manner, whether services are provided by the secretary of state 
 10.2   or at a satellite office location.  Reports by citizens 
 10.3   describing concerns with performance of filing officer 
 10.4   responsibilities must be made to the secretary of state.  The 
 10.5   secretary of state is responsible for responding to reports 
 10.6   about performance in a manner the secretary of state determines 
 10.7   is appropriate. 
 10.8      (b) If, upon investigation of citizen reports described in 
 10.9   subdivision 1, the secretary of state determines that 
 10.10  performance by a satellite office of the filing officer 
 10.11  responsibilities has been so unsatisfactory that customer 
 10.12  service has been severely impaired, the secretary of state must 
 10.13  terminate the satellite office's status and ability to perform 
 10.14  filing office responsibilities.  If a satellite office's ability 
 10.15  to perform filing office responsibilities is terminated by the 
 10.16  secretary of state, the change in status must be posted in the 
 10.17  former satellite office and must also be publicly posted in the 
 10.18  county courthouse in the county in which the former satellite 
 10.19  office is located and must be made available in an electronic 
 10.20  format. 
 10.21     Subd. 6.  [RECORD RETENTION.] Once the image of a paper 
 10.22  record has been captured by the computerized filing system, the 
 10.23  secretary of state may remove or direct the removal from the 
 10.24  files and destroy the paper record. 
 10.25     Sec. 5.  Minnesota Statutes 2002, section 336A.04, is 
 10.26  amended to read: 
 10.27     336A.04 [FILING EFFECTIVE FINANCING STATEMENT OR LIEN 
 10.28  NOTICE.] 
 10.29     Subdivision 1.  [FILING LOCATION.] An effective financing 
 10.30  statement or lien notice must be filed in the computerized 
 10.31  filing system operated by the Office of the Secretary of State.  
 10.32  or the county recorder in the county of the debtor's residence 
 10.33  if the debtor is an individual or organization with residence in 
 10.34  this state.  If the debtor is not a resident of this state, the 
 10.35  effective financing statement or lien notice must be filed in 
 10.36  the Office of the Secretary of State.  Effective financing 
 11.1   statements and lien notices may be filed in writing or by any 
 11.2   other means authorized from a filing officer. 
 11.3      Subd. 2.  [EFFECTIVE FILING.] Presentation of an effective 
 11.4   financing statement or lien notice with the appropriate filing 
 11.5   fee to a filing officer or acceptance of the statement by a 
 11.6   filing officer constitutes filing under this chapter.  
 11.7      Subd. 3.  [FEES.] (a) The fee for filing and indexing a 
 11.8   standard form or format for a lien notice, effective financing 
 11.9   statement, or continuation statement, and stamping the date and 
 11.10  place of filing on a copy of the filed document furnished by the 
 11.11  filing party is $15 for up to two debtor names and $15 for each 
 11.12  additional name thereafter until June 30, 2005.  Effective July 
 11.13  1, 2005, the fee for each filing will be as follows: 
 11.14     (1) $15 for each filing made through the Web interface of 
 11.15  the Office of the Secretary of State; and 
 11.16     (2) $20 for each filing submitted in any other manner. 
 11.17     (b) A fee may not be charged for filing a termination 
 11.18  statement if the termination is filed within 30 days after 
 11.19  satisfaction of the lien or security interest.  Otherwise, the 
 11.20  fee is $10.  
 11.21     (c) A county recorder shall forward $5 of each filing fee 
 11.22  collected under this subdivision to the secretary of state.  
 11.23  Surcharge amounts shall be collected quarterly by the secretary 
 11.24  of state from each county recorder.  The secretary of state 
 11.25  shall send each county recorder an invoice at the end of each 
 11.26  fiscal quarter and each county recorder shall forward payment to 
 11.27  the secretary of state within 30 days of the date of the 
 11.28  invoice.  The surcharge amounts received from county recorders 
 11.29  and the surcharge amounts collected by the secretary of state's 
 11.30  office must be deposited in the state treasury and credited to 
 11.31  the general fund.  The balance of the Filing fees collected by a 
 11.32  county recorder satellite office must be deposited in the 
 11.33  general fund of the county in which the satellite office is 
 11.34  located.  
 11.35     Subd. 3a.  [STANDARD FORMS.] The standard form for a lien 
 11.36  notice, effective financing statement, continuation statement, 
 12.1   or termination statement is available from the filing office. 
 12.2      Subd. 4.  [FILING PROCEDURE.] (a) The filing officer shall 
 12.3   mark the effective financing statement or lien notice with a 
 12.4   consecutive file number and the date and hour of filing.  For 
 12.5   each effective financing statement, lien notice, continuation 
 12.6   statement, or termination statement filed in a filing office, 
 12.7   the filing office shall: 
 12.8      (1) assign a unique number to the filed record; 
 12.9      (2) create a record that bears the number assigned to the 
 12.10  filed record and the date and time of filing; 
 12.11     (3) maintain the filed record for public inspection; and 
 12.12     (4) index the filed record in accordance with paragraph (b).
 12.13     (b) The filing office shall maintain the original filed 
 12.14  document or a copy of the filed document in a format that meets 
 12.15  archival standards for public inspection as provided in rule by 
 12.16  the secretary of state. index an effective financing statement 
 12.17  or lien notice according to the name of the debtor and index all 
 12.18  filed records relating to the initial filing in a manner that 
 12.19  associates the related filings with the initial effective 
 12.20  financing statement or lien notice. 
 12.21     (c) The filing office shall index filed documents according 
 12.22  to the file number of the document. maintain a capability: 
 12.23     (1) to retrieve a record by the name of the debtor and by 
 12.24  the file number assigned to the initial effective financing 
 12.25  statement or lien notice to which the record relates; and 
 12.26     (2) to associate and retrieve with one another an initial 
 12.27  effective financing statement or lien notice and each filed 
 12.28  record relating to the initial effective financing statement or 
 12.29  lien notice as the case may be. 
 12.30     (d) The filing office may not remove a debtor's name from 
 12.31  the index until one year after the effectiveness of an effective 
 12.32  financing statement or lien notice naming the debtor lapses 
 12.33  under section 336A.03, subdivision 5, paragraph (b), clause (1), 
 12.34  or paragraph (c), clause (1). 
 12.35     (e) The filing office shall maintain a record of the 
 12.36  information provided in a filed effective financing statement or 
 13.1   lien notice for at least one year after the effectiveness of the 
 13.2   financing statement or lien notice has lapsed under section 
 13.3   336A.03, subdivision 5, paragraph (b), clause (1), or paragraph 
 13.4   (c), clause (1).  The record must be retrievable by using the 
 13.5   name of the debtor and by using the file number assigned to the 
 13.6   initial effective financing statement or lien notice to which 
 13.7   the record relates. 
 13.8      (f) Except to the extent that a statute governing 
 13.9   disposition of public records provides otherwise, the filing 
 13.10  office immediately may destroy any written record evidencing an 
 13.11  effective financing statement or lien notice.  However, if the 
 13.12  filing office destroys a written record, it shall maintain 
 13.13  another record of the effective financing statement or lien 
 13.14  notice which complies with paragraph (e). 
 13.15     Subd. 5.  [ENTERING FILING INFORMATION INTO COMPUTERIZED 
 13.16  FILING SYSTEM.] Each filing office shall enter the information 
 13.17  from the filed documents into the computerized filing system as 
 13.18  prescribed by the secretary of state.  
 13.19     The secretary of state shall record lien notices in the 
 13.20  computerized filing system in a manner that separately 
 13.21  identifies all farm products statutory liens, and shall ensure 
 13.22  that the computerized filing and notification system 
 13.23  distinguishes security interests covered by effective financing 
 13.24  statements from liens covered by lien notices to the extent 
 13.25  required by United States Code, title 7, section 1631, et seq., 
 13.26  and regulations adopted under those sections.  
 13.27     Subd. 6.  [VERIFICATION OF INFORMATION.] A person who has 
 13.28  filed an effective financing statement or lien notice may verify 
 13.29  the accuracy of the information entered into the computerized 
 13.30  filing system and compiled into the master list by making an 
 13.31  inquiry under section 336A.09.  The secretary of state shall 
 13.32  establish a procedure for requesting an inquiry to verify the 
 13.33  accuracy of the information at the time of filing. 
 13.34     Sec. 6.  Minnesota Statutes 2002, section 336A.05, is 
 13.35  amended to read: 
 13.36     336A.05 [EFFECT OF FILING ON PERFECTION AND PRIORITY.] 
 14.1      Filing under this chapter does not affect the perfection or 
 14.2   priority of security interests filed under the Uniform 
 14.3   Commercial Code or a farm products statutory lien filed in 
 14.4   accordance with the provisions of law under which it was created 
 14.5   and does not affect the priority of a security interest in farm 
 14.6   products or a farm products statutory lien except as provided in 
 14.7   section 336A.15 or 336A.16 and United States Code, title 7, 
 14.8   section 1631. 
 14.9      Sec. 7.  Minnesota Statutes 2002, section 336A.06, is 
 14.10  amended to read: 
 14.11     336A.06 [CONTINUATION STATEMENT.] 
 14.12     Subdivision 1.  [FILING PERIOD.] A secured party may file a 
 14.13  continuation statement for an effective financing statement 
 14.14  within six months before a five-year effective period expires.  
 14.15     Subd. 2.  [CONTENTS.] A continuation statement must: 
 14.16     (1) be signed, authorized, or otherwise authenticated by 
 14.17  the secured party and the debtor; 
 14.18     (2) identify the original effective financing statement by 
 14.19  file number; and 
 14.20     (3) state that the original effective financing statement 
 14.21  is still effective.  
 14.22     Subd. 3.  [EFFECTIVE PERIOD.] If a continuation statement 
 14.23  is filed within six months before a five-year effective period 
 14.24  expires, the effectiveness of the original effective financing 
 14.25  statement continues for an additional five years after the 
 14.26  original five-year effective period.  Additional continuation 
 14.27  statements filed within six months before an effective period 
 14.28  expires continue the effectiveness of the original effective 
 14.29  financing statement for additional five-year periods.  
 14.30     Subd. 4.  [FILING.] The continuation statement must be 
 14.31  filed in the filing office where the original effective 
 14.32  financing statement is filed computerized filing system of the 
 14.33  Office of the Secretary of State.  
 14.34     Sec. 8.  Minnesota Statutes 2002, section 336A.07, is 
 14.35  amended to read: 
 14.36     336A.07 [TERMINATION STATEMENTS.] 
 15.1      Subdivision 1.  [REQUIREMENT.] (a) If required in an 
 15.2   effective financing statement, A secured party shall within 30 
 15.3   days file a lien termination statement and termination statement 
 15.4   for the effective financing statement when:  
 15.5      (1) an outstanding secured obligation does not exist; and 
 15.6      (2) a written commitment to make advances, incur 
 15.7   obligations, or otherwise give value does not exist.  
 15.8      (b) A lienholder shall file a termination statement with 
 15.9   respect to a lien notice within 30 days after an outstanding 
 15.10  lien notice obligation no longer exists.  
 15.11     Subd. 2.  [CONTENTS.] (a) Unless filed pursuant to section 
 15.12  336A.03, subdivision 4, in order to amend an effective financing 
 15.13  statement or a lien notice, a lien termination statement and 
 15.14  termination statement for the a lien notice or an effective 
 15.15  financing statement must: 
 15.16     (1) state the file number of the effective financing 
 15.17  statement or lien notice; 
 15.18     (2) state the date on which the lien or security interest 
 15.19  was satisfied; 
 15.20     (3) state that the secured party does not claim a security 
 15.21  interest under the effective financing statement or that the 
 15.22  lienholder does not claim a lien under the lien notice; and 
 15.23     (4) be signed, authorized, or otherwise authenticated by 
 15.24  the secured party or lienholder. 
 15.25     (b) If a termination statement is filed pursuant to section 
 15.26  336A.03, subdivision 4, in order to amend an effective financing 
 15.27  statement or a lien notice, the termination statement must: 
 15.28     (1) state the file number of the effective financing 
 15.29  statement or lien notice; and 
 15.30     (2) be signed, authorized, or otherwise authenticated by 
 15.31  the secured party or lienholder. 
 15.32     Subd. 3.  [FILING.] A termination statement for an 
 15.33  effective financing statement or a lien notice must be filed in 
 15.34  the computerized filing system operated by the secured party in 
 15.35  the filing office where the original effective financing 
 15.36  statement is filed.  A termination statement for the lien notice 
 16.1   must be filed by the lienholder in the same manner required for 
 16.2   filing the lien notice Office of the Secretary of the State.  
 16.3      Subd. 4.  [FAILURE TO FILE.] If the secured party or 
 16.4   lienholder fails to file a termination statement as required by 
 16.5   subdivision 1, or within ten days after a debtor serves a 
 16.6   written demand for the termination statement if the conditions 
 16.7   in subdivision 1 exist, the secured party or lienholder is 
 16.8   liable to the debtor for $100 plus any loss caused to the debtor 
 16.9   by failing to file the termination statement.  For the second 
 16.10  and each subsequent time a secured party or lienholder is found 
 16.11  liable to a debtor under this subdivision in any one calendar 
 16.12  year, the secured party or lienholder is liable to the debtor 
 16.13  for $250 plus any loss caused to the debtor. 
 16.14     Subd. 5.  [FILING PROCEDURES.] (a) When a termination 
 16.15  statement is filed, each filing office must delete the 
 16.16  information from the active files as prescribed by the secretary 
 16.17  of state.  
 16.18     (b) If the termination statement is filed in duplicate, the 
 16.19  filing office shall return one copy of the termination 
 16.20  statement, stamped to show the time of receipt, to the secured 
 16.21  party or lienholder.  
 16.22     Sec. 9.  Minnesota Statutes 2002, section 336A.08, is 
 16.23  amended to read: 
 16.24     336A.08 [MASTER LIST.] 
 16.25     Subdivision 1.  [COMPILATION.] (a) The secretary of state 
 16.26  shall compile the information on effective financing statements 
 16.27  in the computerized filing system into a master list: 
 16.28     (1) organized according to farm product; 
 16.29     (2) arranged within each product: 
 16.30     (i) in alphabetical order according to the last name of the 
 16.31  individual debtor or, in the case of debtors doing business 
 16.32  other than as individuals, the first word in the name of the 
 16.33  debtors; 
 16.34     (ii) in numerical order according to the Social Security 
 16.35  number of the individual debtor or, in the case of debtors doing 
 16.36  business other than as individuals, the Internal Revenue Service 
 17.1   taxpayer identification number of the debtors; 
 17.2      (iii) geographically by county; and 
 17.3      (iv) by crop year; and 
 17.4      (3) containing the information provided on an effective 
 17.5   financing statement; and 
 17.6      (4) designating any applicable terminations of the 
 17.7   effective financing statement.  
 17.8      (b) The secretary of state shall compile information from 
 17.9   lien notices recorded in the computerized filing system into a 
 17.10  statutory lien master list in alphabetical order according to 
 17.11  the last name of the individual debtor or, in the case of 
 17.12  debtors doing business other than as individuals, the first word 
 17.13  in the name of the debtors.  The secretary of state may also 
 17.14  organize the statutory lien master list according to one or more 
 17.15  of the categories of information established in paragraph 
 17.16  (a).  Any terminations of lien notices must be noted. 
 17.17     Subd. 2.  [REMOVAL OF EFFECTIVE FINANCING STATEMENTS AND 
 17.18  LIEN NOTICES.] The secretary of state shall remove lapsed and 
 17.19  terminated effective financing statements and lien notices from 
 17.20  the computerized filing system before preparing master lists.  
 17.21     Subd. 3.  [REQUEST FOR PARTIAL MASTER LIST.] If requested 
 17.22  by a buyer registered under section 336A.11, the secretary of 
 17.23  state shall distribute partial master lists to the buyer that 
 17.24  are limited to one or more of the categories in subdivision 1, 
 17.25  paragraph (a). 
 17.26     Subd. 3a.  [ALL CROPS OR ALL LIVESTOCK DEFINED.] A 
 17.27  registered buyer who requests a monthly list may ask for a list 
 17.28  of all crops including wool, milk, eggs, cheese, and honey/bees 
 17.29  wax, all livestock including wool, milk, eggs, cheese, and 
 17.30  honey/bees wax, or both.  The list given to the buyer must then 
 17.31  include information about all the crops or all the livestock 
 17.32  listed in subdivision 1, or both. 
 17.33     Subd. 4.  [DISTRIBUTION OF MASTER AND PARTIAL LISTS.] (a) 
 17.34  The secretary of state shall maintain the information on the 
 17.35  effective financing statement master list: 
 17.36     (1) by farm product arranged alphabetically by debtor; and 
 18.1      (2) by farm product arranged numerically by the debtor's 
 18.2   Social Security number for an individual debtor or, in the case 
 18.3   of debtors doing business other than as individuals, the 
 18.4   Internal Revenue Service taxpayer identification number of the 
 18.5   debtors. 
 18.6      (b) The secretary of state shall maintain the information 
 18.7   in the farm products statutory lien master list by county 
 18.8   arranged alphabetically by debtor. 
 18.9      (c) The secretary of state shall distribute or make 
 18.10  available the requested master and partial master lists on a 
 18.11  monthly basis to farm product dealers registered under section 
 18.12  336A.11.  The secretary of state may, by rule, establish that 
 18.13  lists of certain farm products must be distributed more 
 18.14  frequently.  Lists will be distributed or made available on or 
 18.15  before the tenth day of each month or on the next business day 
 18.16  thereafter if the tenth day is not a business day. 
 18.17     (d) The secretary of state shall, by rule, establish: 
 18.18     (1) dates when the distribution of lists will be made; 
 18.19     (2) dates after which a filing of an effective financing 
 18.20  statement or lien notice will not be reflected on the next lists 
 18.21  distributed; and 
 18.22     (3) dates by which a registrant must complete a 
 18.23  registration to receive the next list distributed.  
 18.24     (e) The secretary of state shall make the master and 
 18.25  partial master lists available as written or printed paper 
 18.26  documents and may make lists available in other forms or media, 
 18.27  including: 
 18.28     (1) microfiche; 
 18.29     (2) magnetic tape; 
 18.30     (3) any electronically transmitted medium; or 
 18.31     (4) computer disk (2) any form of digital media.  
 18.32     (f) (e) There shall be no fee for partial or master lists 
 18.33  distributed on microfiche, magnetic tape, via an electronically 
 18.34  transmitted medium, computer disk, or comparable media.  The 
 18.35  annual fee for any other form of digital media is $200.  The 
 18.36  annual fee for paper partial lists is $250 and $400 for paper 
 19.1   master lists.  
 19.2      (g) At the request of a farm product dealer registered 
 19.3   under section 336A.11, the secretary of state shall deliver 
 19.4   lists at cost by certified or registered mail, return receipt 
 19.5   requested.  
 19.6      (f) A farm products dealer shall register pursuant to 
 19.7   section 336A.11 by the last business day of the month to receive 
 19.8   the monthly lists requested by the farm products dealer for that 
 19.9   month. 
 19.10     (g) If a registered farm products dealer receives a monthly 
 19.11  list that cannot be read or is incomplete, the farm products 
 19.12  dealer must immediately inform the secretary of state by 
 19.13  telephone or e-mail of the problem.  The registered farm 
 19.14  products dealer shall confirm the existence of the problem by 
 19.15  writing to the secretary of state.  The secretary of state shall 
 19.16  provide the registered farm products dealer with new monthly 
 19.17  lists in the medium chosen by the registered farm products 
 19.18  dealer no later than five business days after receipt of the 
 19.19  oral notice from the registered farm products dealer.  A 
 19.20  registered farm products dealer is not considered to have 
 19.21  received notice of the information on the monthly lists until 
 19.22  the duplicate list is received from the secretary of state or 
 19.23  until five days have passed since the duplicate lists were 
 19.24  deposited in the mail by the secretary of state, whichever comes 
 19.25  first. 
 19.26     (h) On receipt of a written notice pursuant to section 
 19.27  336A.13, the secretary of state shall duplicate the monthly 
 19.28  lists requested by the registered farm products dealer.  The 
 19.29  duplicate monthly lists must be sent to the registered farm 
 19.30  products dealer no later than five business days after receipt 
 19.31  of the written notice from the registered farm products dealer. 
 19.32     (i) A registered farm products dealer may request monthly 
 19.33  lists in one medium per registration. 
 19.34     (j) Registered farm products dealers must have renewed 
 19.35  their registration before the first day of July each year.  
 19.36  Failure to send in the registration before that date will result 
 20.1   in the farm products dealer not receiving the requested monthly 
 20.2   lists. 
 20.3      (k) Registered farm products dealers choosing to obtain 
 20.4   monthly lists via an electronically transmitted medium or in any 
 20.5   form of digital media may choose to receive all of the 
 20.6   information for the monthly lists requested the first month and 
 20.7   then only additions and deletions to the database for the 
 20.8   remaining 11 months of the year.  Following the first year of 
 20.9   registration, the registered farm products dealer may choose to 
 20.10  continue to receive one copy of the full monthly list at the 
 20.11  beginning of each year or may choose to receive only additions 
 20.12  and deletions. 
 20.13     Sec. 10.  Minnesota Statutes 2002, section 336A.09, is 
 20.14  amended to read: 
 20.15     336A.09 [INQUIRIES.] 
 20.16     Subdivision 1.  [PROCEDURE.] (a) Oral and written inquiries 
 20.17  regarding information provided by the filing of effective 
 20.18  financing statements or lien notices may be made at any filing 
 20.19  office during regular business hours. 
 20.20     (b) A filing office receiving an oral or written inquiry 
 20.21  shall, upon request, provide an oral or facsimile response to 
 20.22  the inquiry and must mail send a confirmation of the inquiry in 
 20.23  writing by the end of the next business day after the inquiry is 
 20.24  received.  
 20.25     (c) A filing office shall maintain a record of inquiries 
 20.26  made under this section including:  
 20.27     (1) the date of the inquiry; 
 20.28     (2) the name of the debtor inquired about; and 
 20.29     (3) identification of the person making the request for 
 20.30  inquiry.  
 20.31     Subd. 2.  [SEARCHES; FEES.] (a) If a person makes a 
 20.32  request, the filing officer shall conduct a search of the 
 20.33  computerized filing system for effective financing statements or 
 20.34  lien notices and statements of continuation of a particular 
 20.35  debtor.  The filing officer shall produce a report including the 
 20.36  date, time, and results of the search by issuing: 
 21.1      (1) a certificate listing of the file number, date, and 
 21.2   hour of each effective financing statement found in the search 
 21.3   and the names and addresses of each secured party on the 
 21.4   effective financing statements or of each lien notice found in 
 21.5   the search and the names and address of each lienholder on the 
 21.6   lien notice; or 
 21.7      (2) photocopies of the original effective financing 
 21.8   statement or lien notice documents on file; or 
 21.9      (3) upon request, both the certificate report and 
 21.10  photocopies of the effective financing statements or lien 
 21.11  notices. 
 21.12     (b) The uniform fee for conducting a search and for 
 21.13  preparing a certificate report is $15 $20 per debtor name if 
 21.14  the request is in the standard form prescribed by the secretary 
 21.15  of state.  This uniform fee shall include ten photocopies of 
 21.16  original documents. If the request for information is made on a 
 21.17  form other than the standard form prescribed by the secretary of 
 21.18  state, the fee is $20 per debtor name and shall include ten 
 21.19  photocopies of original documents.  An additional fee of $1 per 
 21.20  page must be charged for each photocopy prepared in excess of 
 21.21  the first ten.  If an oral or facsimile response is requested, 
 21.22  there is an additional fee of $5 per debtor name requested.  A 
 21.23  fee of $1 per page will be charged for photocopies of effective 
 21.24  financing statements, lien notices, continuation statements, or 
 21.25  termination statements. 
 21.26     (c) A county recorder shall forward $5 of each search fee 
 21.27  collected under this subdivision to the secretary of state.  
 21.28  Surcharge amounts shall be collected quarterly by the secretary 
 21.29  of state from each county recorder.  The secretary of state 
 21.30  shall send each county recorder an invoice at the end of each 
 21.31  fiscal quarter and each county recorder shall forward payment to 
 21.32  the secretary of state within 30 days of the date of the invoice.
 21.33  The surcharge amounts received from county recorders and the 
 21.34  surcharge amounts collected by the Secretary of State's Office 
 21.35  must be deposited in the state treasury and credited to the 
 21.36  general fund.  The balance of the Search fees collected by a 
 22.1   county recorder satellite office must be deposited in the 
 22.2   general fund of the county where the satellite office is located.
 22.3      Sec. 11.  Minnesota Statutes 2002, section 336A.10, is 
 22.4   amended to read: 
 22.5      336A.10 [LIABILITY FOR INFORMATION ERRORS IMMUNITY.] 
 22.6      (a) Except as provided in sections 609.87 to 609.891, the 
 22.7   state, the secretary of state, counties, county recorders, and 
 22.8   their employees and agents are immune from liability as a result 
 22.9   of errors or omissions in information supplied under this 
 22.10  chapter. 
 22.11     (b) The secretary of state, county recorders, and their 
 22.12  employees and agents are not liable for any loss or damages 
 22.13  arising from errors in or omissions from information entered 
 22.14  into the computerized filing system as a result of the 
 22.15  electronic transmission of effective financing statements and 
 22.16  lien notices. 
 22.17     Sec. 12.  Minnesota Statutes 2002, section 336A.11, 
 22.18  subdivision 1, is amended to read: 
 22.19     Subdivision 1.  [REQUIREMENTS.] Farm product dealers may 
 22.20  register with the secretary of state to receive master lists of 
 22.21  notices of security interests in farm products or farm products 
 22.22  statutory liens.  Registration must be made on an annual 
 22.23  calendar year basis.  A registration is not complete until the 
 22.24  registration form or format is properly completed and received 
 22.25  by the secretary of state and accompanied by the registration 
 22.26  fee.  Registration entitles a farm product dealer to receive 
 22.27  lists for those farm products specified by the registrant at the 
 22.28  time of registration. 
 22.29     Sec. 13.  Minnesota Statutes 2002, section 336A.11, 
 22.30  subdivision 2, is amended to read: 
 22.31     Subd. 2.  [REGISTRATION FORMS OR FORMAT.] The secretary of 
 22.32  state shall make registration forms or format available to farm 
 22.33  product dealers.  The secretary of state must also make 
 22.34  registration information available to the commissioner of 
 22.35  agriculture for distribution to applicants for licensure under 
 22.36  section 17A.04 or 223.17.  The registration form or format must 
 23.1   include provisions for the name and address of the farm product 
 23.2   dealer, a request for the master or partial master lists, and 
 23.3   the medium on which the farm product dealer desires to receive 
 23.4   the master list.  
 23.5      Sec. 14.  Minnesota Statutes 2002, section 336A.12, is 
 23.6   amended to read: 
 23.7      336A.12 [RULES.] 
 23.8      Subdivision 1.  [AUTHORITY.] (a) The secretary of state may 
 23.9   adopt permanent rules to implement this chapter.  
 23.10     (b) If necessary to obtain federal certification of the 
 23.11  computerized filing system, additional or alternative 
 23.12  requirements made in conformity with United States Code, title 
 23.13  7, section 1631, may be adopted by the secretary of state by 
 23.14  rule.  
 23.15     Subd. 2.  [FORMS OR FORMAT.] The secretary of state shall 
 23.16  prescribe the forms or format to be used for effective financing 
 23.17  statements, lien notices, combined forms, amendments, 
 23.18  continuation statements, termination statements, and notices to 
 23.19  debtors.  
 23.20     Sec. 15.  Minnesota Statutes 2002, section 336A.13, is 
 23.21  amended to read: 
 23.22     336A.13 [RECEIPT OF WRITTEN NOTICE.] 
 23.23     For purposes of United States Code, title 7, section 1631, 
 23.24  and this chapter, receipt of written notice means the date the 
 23.25  notice is actually received by a farm product dealer or the 
 23.26  first date that delivery is attempted by a carrier.  A farm 
 23.27  product dealer must act in good faith.  For a mailed notice, a 
 23.28  farm product dealer is presumed to have received the notice by 
 23.29  five business days after it was mailed unless by ten days after 
 23.30  it was mailed the farm product dealer notifies the secretary of 
 23.31  state in writing that it has not received the notice by that 
 23.32  time. 
 23.33     Sec. 16.  [TEMPORARY SURCHARGE.] 
 23.34     A $10 surcharge on every effective financing statement and 
 23.35  lien notice filed on or after July 1, 2004, shall be collected 
 23.36  and remitted to the secretary of state for deposit in the 
 24.1   general fund. 
 24.2      This section expires June 30, 2005. 
 24.3      Sec. 17.  [APPROPRIATION.] 
 24.4      $62,000 is appropriated in fiscal year 2005 from the 
 24.5   general fund to the secretary of state for purposes of 
 24.6   implementing this act.  This is a onetime appropriation. 
 24.7      Sec. 18.  [REPEALER.] 
 24.8      Minnesota Rules, parts 8265.0100; 8265.0200; 8265.0300; 
 24.9   8265.0400; 8265.0500; and 8265.0600, are repealed on the 
 24.10  application date specified in section 19. 
 24.11     Sec. 19.  [EFFECTIVE DATE; APPLICATION.] 
 24.12     (a) Sections 1 to 15 are effective August 1, 2004, and 
 24.13  apply to all effective financing statements and lien notices 
 24.14  governed by Minnesota Statutes, chapter 336A, that are made on 
 24.15  or after February 1 following the calendar year the United 
 24.16  States Department of Agriculture approves the central filing 
 24.17  system pursuant to United States Code, title 7, section 1631, 
 24.18  and notifies the secretary of state of the approval. 
 24.19     (b) The secretary of state shall promptly notify the 
 24.20  revisor of statutes of the notification in paragraph (a) for 
 24.21  purposes of determining the application date in section 18.